Slide 1: DENSO Corporation Financial Results
obe 30, 2015 = SO CORPORATION
Slide 2: Overview of FY2016 2nd Quarter Financial Results
Overview of FY2016 2"? Quarter Financial Results TEE 1.Revenue and operating profit increased due to overseas production volume increase and the growth in sales as well as the depreciation of yen. Operating profit (excludes other income/expenses) increased due to the depreciation of yen and cost red
Slide 3: Overview of the consolidated financial results
[Overview of the consolidated financial results] We posted revenue of 2,228.5 billion yen, up 158.3 billion yen from the previous year, equivalent to annual revenue growth of 7.6%. Operating profit (excludes other income/ expenses) reached 167.2 billion yen, 6.7 billion yen higher than a year, up 4.
Slide 4: Sales by customer
[Sales by customer] Sales to the Toyota Group Domestic car production level decreased mainly due to compact cars. However, total sales increased boosted by the steady production in North America. Sales to non-Toyota Group companies 1)Honda: Sales increased due to the increase in car production mainl
Slide 5: Sales by business segment
[Sales by business segment] Sales of Powertrain Control products Sales increased due to production volume increase in North America and Europe on the top of sales expansion in gasoline direct injection products. Sales of Thermal products Sales increased mainly in Europe due to the production volume
Slide 6: Factors that contributed to increases or decreases in operating profit
[Factors that contributed to increases or decreases in operating profit] Negative factors 1) Higher expense: An increase of 10.0 billion yen was mainly due to an increase in R&D expenses for future growth. 2) Higher depreciation cost: An increase of 8.2 billion yen was due to an increase in investme
Slide 7: Revenue and operating profit by operating region
[Revenue and operating profit by operating region] * Based on Japanese yen
Slide 8: Revenue and operating profit by operating region
[Revenue and operating profit by operating region] * Based on local currency, excluding the effect of foreign exchange rates. Excludes other income and expenses. Japan • Revenue decreased by 0.9% from the previous year due to reduction of production mainly in compact cars. • Operating profit diminis
Slide 9: Forecasts for consolidated full-year financial forecasts
[Forecasts for consolidated full-year financial forecasts] Considering the market trend, we have decided to revise the original forecasts for the full-year financial results. This forecast is based on the currency rate of 121 yen to the dollar and 133 yen to the euro. We expect revenue to be 4,520.0
Slide 10: DENSO
DENSO
Slide 11: Topics
Topics 9 185 DENSO Group’s growth strategy 1. Mid-term policy 2018 2. Business field to concentrate (1) Environment and Security & Safety (2) Aftermarket & New business (3) World Market DENSO
Slide 12: Mid-term Policy 2018
Mid-term Policy 2018 We formulated Mid-term Policy 2018, which sets out measures for the next three years, to achieve the goals for 2020. We started to work on the Mid-term Policy from this fiscal year. Specifically, we will concentrate on three business fields by 2018: “Environment, Security and Sa
Slide 13: Environment
Environment DENSO is conducting integrated research on injection, ignition, and emission treatment for ICEs including gasoline and diesel engines, in order to improve efficiency. We will develop and release small, inexpensive, and highly efficient systems to assist electrification. In anticipation o
Slide 14: Products developed for different types of drivetrain
The products, which are developed for different types of drivetrain, are offered to the market through optimal combination of ICE and electrification technologies, to meet the needs of respective regions and customers. We have an advantage in taking a “full lineup” strategy in the area of powertrain
Slide 15: Power control unit for Toyota's new Prius
Here, I would like to introduce our power control unit for Toyota’s new Prius as an example of electrification. In Japan, much of the driving is done on urban roads. Due to frequent start-stop cycles, there is high demand for hybrid vehicles to increase fuel efficiency. We worked on innovating the t
Slide 16: Security & Safety
Security & Safety Car ownership has been increasing primarily in emerging countries. However, the increased car ownership is accompanied by a negative aspect: more traffic accidents. DENSO became the global leader in developing and mass-producing safe driving support products in the 1990s. To achiev
Slide 17: Active safety market and sensors
To meet the ever-tighter safety regulations in respective countries, the “active safety” market has been expanding. It is worth noting that our newly developed millimeter-wave radar and vision sensor are now the standard equipment of one particular automaker. These products are characterized by high
Slide 18: Automated driving on highways
We have been developing products to achieve automated driving on a highway, and field tests have already commenced on a highway. We will accelerate our development of the Advanced Driving Assistant System for automated driving.
Slide 19: Advanced Driving Assistant System technologies
The Advanced Driving Assistant System is achieved by three types of technologies: first, sensing technologies to detect hazards around the vehicle, avoid collision, and reduce damage; second, information communication technologies to identify hazards that are not visible to the driver and support sa
Slide 20: Aftermarket & New Business
Aftermarket & New Business Regarding new business, we started business in six areas including micro grid, security, and agricultural support systems. We have been working on the “solution business” from the viewpoint of users, to use technologies refined in the automotive components business to solv
Slide 21: Agriculture solutions in Japan
Agriculture in Japan faces issues such as aging of farmers and decreasing cultivated area. It is necessary to enhance competitiveness against imported products. We have been working to increase the efficiency and stability of production and improve the added value of agricultural products by applyin
Slide 22: World Market
World Market With the increasing global sales of vehicles, we will achieve growth beyond market expansion. In this context, the “World Market” is particularly important. To expand sales, the Technical Centers we have established in seven regions worldwide will closely work with production bases. The
Slide 23: Global production network
We have enhanced our global production network to release competitive new products, achieve optimal production by multi-factory parallel production, and ensure stable quality. More recently, we have been able to establish a global supply network encompassing Mexico and Indonesia. We need to effectiv
Slide 24: DANTOTSU factory activities and IoT
To improve competitiveness, we have been promoting DANTOTSU factory activities to achieve monozukuri with DANTOTSU competitiveness by introducing the 1/N equipment, in particular. IoT, the latest information technology, will be the key to attaining higher goals. We have long worked to increase effic
Slide 25: The 43rd WorldSkills Competition (Brazil)
\ The 43rd WorldSkil DENSO lis Competition (Brazil
Slide 26: Appendix
Appendix 24 * Change in FY2016 Operating Profit *Change in FY2016 Geographical Segments by Company Location Forecast + 2"4 Quarter(3months) Geographical Segments by Company Location * Non-Consolidated Financial Results - Pre-Conditions (Foreign Exchange Rate/Car Production) - Consolidated Revenue by
Slide 27: Change in FY2016 Operating Profit
Change in FY2016 Operating Profit 25 Giheniaoons Variable (Unit: Billion of Yen) / expenses cost Teeberane Pp 26.8 { reduction 590.0 +31.5 — 7288 46.0 CurrencyR YAIR) ciation labor 2145 +260 ‘increase 1350.0 feet Expense -11.6 Production . Others volume Product increase mix etc. perating profit ther
Slide 28: Geographical segments by company location (2nd Quarter)
(Unit: Billions of Yen) Revenue Operating [ I: Ratio to Revenue 196.9 Profit FY15 FY16F FY15 FY16F North Japan America Europe Asia _Others Japan America Europe Asia Others DENSO
Slide 29: Change in FY2016 Geographical Segments by Company Location Forecast
Change in FY2016 Geographical Segments by Company Location Forecast (Local Currency Base,excludes other income/expenses) 27 Revenue 2,664.5 2,650.0 5% 2,600 +7.1% 1,123.7 +5.9% 1,023.9 966. 1,049. +13.4% 629.3 554.8 FY15 FY16F North America Europe Japan DENSO Asia Others 250 200 50 (Unit: Billions o
Slide 30: Geographical segments by company location
(Unit: Billions of Yen) 6608 438 [J]: Ratio to Sales sso | ps8 Revenue (6.6%) Operating Profit 0.3% 600 40 550 500 10 -73.9% 0.7 0.2 [3.7%] 01.1%) C) FY15 FY16 FY1S FY16 2020 North 2020 North Japan America Europe Asia Others Japan America Europe Asia Others DENSO NSO CORPORATION AA rights reserved
Slide 31: Geographical segments by company location
(Unit: Billions of Yen) 6606 coag Revenue 0.3% FY1S5 FY16 20 20 North Japan America Europe DENSO FY15 FY16 20 22 North Japan America Europe Asia Others 30 CORPORATION At rights reserved
Slide 32: Non-Consolidated Financial Results
Non-Consolidated Financial Results 30 Income Statements(Japanese accounting standards) (Ratio to Sales) (Unit: Billions of Yen,%) Change Account FY2016 20 FY2015 2Q Amount __| Percent Net Sales ( 100.0 ) 1,175.3] ( 100.0 ) 1,184.5 -9.2 -0.8 Operating Income ( 59) 68.9]( 67 ) 79.0 -10.1 12.8 Income B
Slide 33: Pre-Conditions: Foreign Exchange Rate and Car Production
FY2016 Full Year FY2016 First-Half FY2016 SecondHalf Forecast] Fema Forecast] Fomen | Forecast Forecast] rowan] Forecast ror vear] Forecast] rowsms,| Actual | Change [Prior Year] corecas'] fam, F] cnange | Prorvear [Forecast] orem] Change Rinionttihenge | “U8 wos] 115] 122] 22] tea] a7] tts] t18] 12
Slide 34: Consolidated Revenue by Customer
(Unit: Billions of Yen) FY2016 FY2015 Change Ended Sep. 30, 2015 | Ended Sep. 30, 2014 % to Total Amount _& to Total Amount s Toyota 4N7 898.5 43.4 nT 35 Daihatsu 19 515 25 -90 “175 Hino 12 20.1 13 -09 -35 Toyota Group 448 977.4 42 21.7 2.2 Honda 80 1445 7.0 33.6 233 FCA 5.1 98.9 47 13.7 138 GM 33 6
Slide 35: Consolidated Revenue by Product
(Unit: Billions of Yen) FY2016 FY2015 Ended Sep 30, 2015 | Ended Sep 30, 2014 Shenae Amount S to Total Amount S to Total Amount bt Powertrain Control 798.1 358] 7309 353) 674 92 Thermal 6429 28.8] 596.7 288) 46.2 11 Information & Safety Systems 324.0 14.6] 293.8 142! 30.2 103 Electronic 185.5 83) 18
Slide 36: Trend of Capital Expenditures, Depreciation and R&D Expenditures
(Unit: Billions of Yen) © 1 helt |e :Ratio to Revenue 400.0 400 “© :Ratio to FYIGF | . F 200 FY14 -FYI5 FY16F DENSO
Slide 37: Capital Expenditures, Depreciation and R&D Expenditures
Capital Expenditures, Depreciation and R&D Expenditures DENSO (Unit: Billions of Yen) Fie | 121 | Progress FY15 Change | toFY16 2Q 2Q | Forecast | tom py | Forecast Japan 88.8] 189.0] 93.0] 183.0] 4.7%| 50.8%. North America 20.4] 48.5| 23.3 45.0] 14.2%| 51.8% Europe 12.9 29.2] 13.0 28.0] 0.8% 46.4%